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Old September 30th, 2014, 07:03 AM   #1
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The Reagan Revolution Is Killing America's Middle Class

Robert Reich: The Reagan revolution is killing America?s middle class - Salon.com


I was in Seattle, Washington, recently, to congratulate union and community organizers who helped Seattle enact the first $15 per hour minimum wage in the country.

Other cities and states should follow Seattle’s example.

Contrary to the dire predictions of opponents, the hike won’t cost Seattle jobs. In fact, it will put more money into the hands of low-wage workers who are likely to spend almost all of it in the vicinity. That will create jobs.

Conservatives believe the economy functions better if the rich have more money and everyone else has less. But they’re wrong. It’s just the opposite.

The real job creators are not CEOs or corporations or wealthy investors. The job creators are members of America’s vast middle class and the poor, whose purchases cause businesses to expand and invest.

America’s wealthy are richer than they’ve ever been. Big corporations are sitting on more cash they know what to do with. Corporate profits are at record levels. CEO pay continues to soar.

But the wealthy aren’t investing in new companies. Between 1980 and 2014, the rate of new business formation in the United States dropped by half, according to a Brookings study released in May.

Corporations aren’t expanding production or investing in research and development. Instead, they’re using their money to buy back their shares of stock.

There’s no reason for them to expand or invest if customers aren’t buying.

Consumer spending has grown more slowly in this recovery than in any previous one because consumers don’t have enough money to buy.

All the economic gains have been going to the top.

The Commerce Department reported last Friday that the economy grew at a 4.6 percent annual rate in the second quarter of the year.

So what? The median household’s income continues to drop.

Median household income is now 8 percent below what it was in 2007, adjusted for inflation. It’s 11 percent below its level in 2000.

It used to be that economic expansions improved the incomes of the bottom 90 percent more than the top 10 percent.

But starting with the “Reagan” recovery of 1982 to 1990, the benefits of economic growth during expansions have gone mostly to the top 10 percent.

Since the current recovery began in 2009, all economic gains have gone to the top 10 percent. The bottom 90 percent has lost ground.

We’re in the first economic upturn on record in which 90 percent of Americans have become worse off.

Why did the playing field start to tilt against the middle class in the Reagan recovery, and why has it tilted further ever since?

Don’t blame globalization. Other advanced nations facing the same global competition have managed to preserve middle class wages. Germany’s median wage is now higher than America’s.

One factor here has been a sharp decline in union membership. In the mid 1970s, 25 percent of the private-sector workforce was unionized.

Then came the Reagan revolution. By the end of the 1980s, only 17 percent of the private workforce was unionized. Today, fewer than 7 percent of the nation’s private-sector workers belong to a union.

This means most workers no longer have the bargaining power to get a share of the gains from growth.

Another structural change is the drop in the minimum wage. In 1979, it was $9.67 an hour (in 2013 dollars). By 1990, it had declined to $6.84. Today it’s $7.25, well below where it was in 1979.

Given that workers are far more productive now – computers have even increased the output of retail and fast food workers — the minimum wage should be even higher.

By setting a floor on wages, a higher minimum helps push up other wages. It undergirds higher median household incomes.

The only way to grow the economy in a way that benefits the bottom 90 percent is to change the structure of the economy. At the least, this requires stronger unions and a higher minimum wage.

It also requires better schools for the children of the bottom 90 percent, better access to higher education, and a more progressive tax system.

GDP growth is less and less relevant to the wellbeing of most Americans. We should be paying less attention to growth and more to median household income.

If the median household’s income is is heading upward, the economy is in good shape. If it’s heading downward, as it’s been for this entire recovery, we’re all in deep trouble.
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Last edited by imaginethat; October 1st, 2014 at 09:31 AM. Reason: fixed punctuation, capitalization
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Old September 30th, 2014, 07:10 AM   #2
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You just listed every economic failure by Obama.
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Old September 30th, 2014, 07:22 AM   #3
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Originally Posted by Jimmyb View Post
You just listed every economic failure by Obama.
Yes, all in opposition to what he said he would do.
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Old September 30th, 2014, 07:25 AM   #4
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Quote:
Originally Posted by Jimmyb View Post
You just listed every economic failure by Obama.
Support that claim with some points please, otherwise, it's merely your biased opinion and another attempt to obfuscate the original point of the thread. Which is your M.O. when you hate the facts contained in any given thread.
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Old September 30th, 2014, 07:34 AM   #5
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Quote:
Originally Posted by skews13 View Post
Robert Reich: The Reagan revolution is killing America?s middle class - Salon.com


I was in Seattle, Washington, recently, to congratulate union and community organizers who helped Seattle enact the first $15 per hour minimum wage in the country.

Other cities and states should follow Seattle’s example.

Contrary to the dire predictions of opponents, the hike won’t cost Seattle jobs. In fact, it will put more money into the hands of low-wage workers who are likely to spend almost all of it in the vicinity. That will create jobs.

Conservatives believe the economy functions better if the rich have more money and everyone else has less. But they’re wrong. It’s just the opposite.

The real job creators are not CEOs or corporations or wealthy investors. The job creators are members of America’s vast middle class and the poor, whose purchases cause businesses to expand and invest.

America’s wealthy are richer than they’ve ever been. Big corporations are sitting on more cash they know what to do with. Corporate profits are at record levels. CEO pay continues to soar.

But the wealthy aren’t investing in new companies. Between 1980 and 2014, the rate of new business formation in the United States dropped by half, according to a Brookings study released in May.

Corporations aren’t expanding production or investing in research and development. Instead, they’re using their money to buy back their shares of stock.

There’s no reason for them to expand or invest if customers aren’t buying.

Consumer spending has grown more slowly in this recovery than in any previous one because consumers don’t have enough money to buy.

All the economic gains have been going to the top.

The Commerce Department reported last Friday that the economy grew at a 4.6 percent annual rate in the second quarter of the year.

So what? The median household’s income continues to drop.

Median household income is now 8 percent below what it was in 2007, adjusted for inflation. It’s 11 percent below its level in 2000.

It used to be that economic expansions improved the incomes of the bottom 90 percent more than the top 10 percent.

But starting with the “Reagan” recovery of 1982 to 1990, the benefits of economic growth during expansions have gone mostly to the top 10 percent.

Since the current recovery began in 2009, all economic gains have gone to the top 10 percent. The bottom 90 percent has lost ground.

We’re in the first economic upturn on record in which 90 percent of Americans have become worse off.

Why did the playing field start to tilt against the middle class in the Reagan recovery, and why has it tilted further ever since?

Don’t blame globalization. Other advanced nations facing the same global competition have managed to preserve middle class wages. Germany’s median wage is now higher than America’s.

One factor here has been a sharp decline in union membership. In the mid 1970s, 25 percent of the private-sector workforce was unionized.

Then came the Reagan revolution. By the end of the 1980s, only 17 percent of the private workforce was unionized. Today, fewer than 7 percent of the nation’s private-sector workers belong to a union.

This means most workers no longer have the bargaining power to get a share of the gains from growth.

Another structural change is the drop in the minimum wage. In 1979, it was $9.67 an hour (in 2013 dollars). By 1990, it had declined to $6.84. Today it’s $7.25, well below where it was in 1979.

Given that workers are far more productive now – computers have even increased the output of retail and fast food workers — the minimum wage should be even higher.

By setting a floor on wages, a higher minimum helps push up other wages. It undergirds higher median household incomes.

The only way to grow the economy in a way that benefits the bottom 90 percent is to change the structure of the economy. At the least, this requires stronger unions and a higher minimum wage.

It also requires better schools for the children of the bottom 90 percent, better access to higher education, and a more progressive tax system.

GDP growth is less and less relevant to the wellbeing of most Americans. We should be paying less attention to growth and more to median household income.

If the median household’s income is is heading upward, the economy is in good shape. If it’s heading downward, as it’s been for this entire recovery, we’re all in deep trouble.
While i agree with most of what is here, and believe there will be an upswing in union membership, you still have to reckon with the corruption.
And until we end the 'never ending profit margin', minimum wage will be redundant. They will merely raise prices and keep the working man down.
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Old September 30th, 2014, 07:34 AM   #6
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Originally Posted by waitingtables View Post
Support that claim with some points please, otherwise, it's merely your biased opinion and another attempt to obfuscate the original point of the thread. Which is your M.O. when you hate the facts contained in any given thread.
You can find the support in about 50 of my posts. Do the research.
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Old September 30th, 2014, 07:44 AM   #7
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Quote:
Originally Posted by Jimmyb View Post
You can find the support in about 50 of my posts. Do the research.
No, back up your claims here or admit they are baseless and another attempt to obfuscate what the OP is about.

What economic policies of this administration are the same as Reagan's and are doing the things to the middle class that the republican's adherence Reagan's policies are doing?
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Old September 30th, 2014, 07:49 AM   #8
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Quote:
Originally Posted by waitingtables View Post
Support that claim with some points please, otherwise, it's merely your biased opinion and another attempt to obfuscate the original point of the thread. Which is your M.O. when you hate the facts contained in any given thread.
I voted for Obama both elections, based on what he said he would do for the American worker. So far to date, we are making less money than ever before, due to higher taxes eliminating our raises, higher insurance, (health, auto, and HO's) and the inflation of food has been astounding. Meat has gone up 20% in two years!
I am sorry to say, (and i mean that) I will not be voting democrat for some time. More laws, rediculous rights to minorities, and huge government. The more i realize just what i am paying for with my taxes the more disgusted i get. The thievery is over the top. Not that it's gov't only, mind you, the astronomical monies made by big companies gives them way too much control of what happens in Washington.
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Old September 30th, 2014, 07:56 AM   #9
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now it is RDS?


Reagan has been out of office for 36 years.
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Old September 30th, 2014, 07:58 AM   #10
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Originally Posted by waitingtables View Post
No, back up your claims here or admit they are baseless and another attempt to obfuscate what the OP is about.

What economic policies of this administration are the same as Reagan's and are doing the things to the middle class that the republican's adherence Reagan's policies are doing?
I've backed them up, and the majority of my posts exposed you as an economic idiot. If you want to drudge them up, knock your lights out. I'm out of the engaging in the old arguments game, all of which are accessible through the search function.
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